Bull of the Day: PPG Industries (PPG)

We reiterate our Outperform recommendation on PPG Industries (PPG), a major global supplier of protective and decorative coatings. The global recession adversely affected many of PPG Industries end-use markets, but the company has responded with aggressive restructuring and cost reduction measures, while further increasing its focus on cash flows.

Earnings are recovering and its strong cash position provides the financial flexibility to support earnings growth going forward. Demand improvements are likely to be led by automotive production in 2010. We expect PPG to experience healthy growth driven by strong macro trends. The company should benefit from its increasing focus on the emerging markets, especially Asia.

PPG’s share price is surging after strong second quarter results. Full year 2010 EPS estimates have shot up 11 cents over the last 7 days.

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